Affluent Millennials are open to non-financial brands, finds a report from LinkedIn [download page] conducted by Ipsos that looks specifically at affluents in the US. At the same time, once they become customers with a financial institution, they’re considerably more likely than their Gen X counterparts to claim loyalty to it.
The survey was fielded in April among 1,507 Millennial and Gen X internet users in the US, defining Millennials as those born between 1981 and 1997 and Gen Xers as those born between 1966 and 1980. The subset of affluents examined were defined as those living in households with investable assets in excess of $100,000. (A separate definition of affluents – those living in households with annual income of at least $100,000 – finds that 28% of the US adult population qualifies, with 22% of these being Millennials aged 18-32. Two-thirds of those qualified on the basis of their parents’ income rather than their own.)
Affluent Millennials in particular provide both opportunities and challenges for traditional financial brands, according to the LinkedIn study results. For example, 69% of affluent Millennials reported being open to financial offerings from non-financial brands, compared to 47% of affluent Gen Xers. At the same time, 47% of affluent Millennials said they are “very” loyal and plan to do more business with the financial institutions they work with (compared to 27% of affluent Gen Xers), and another 48% claim to be “somewhat” loyal to them (versus 59% of affluent Gen Xers). It’s worth noting that as a subset of the 1,500+ survey population, affluents may be a relatively small sample, so while the results are thought-provoking, the comparisons may not be statistically significant.
Nevertheless, affluent Millennials are also more likely than their older counterparts to consider their financial institutions a one-stop shop, per the study’s results. Among those with multiple checking accounts, 54% hold them all with the same institution, versus 33% of affluent Gen Xers. Similarly, among multiple multiple account holders, affluent Millennials are more likely than affluent Gen Xers to keep their retirement accounts (42% vs. 24%), brokerage accounts (37% vs. 23%) and savings (39% vs. 23%) accounts with the same brand.
While that may present opportunities for traditional brands, the report also suggests that there isÂ a “very high risk” of traditional brands losing out to outsider brands. Trust can be a differentiator, as the report’s authors link affluent Millennials’ higher degree of loyalty to their higher level of trust in their current financial institutions.
LinkedIn has some other suggestions for the factors that matter to affluent Millennials: a strong and positive social presence; a relationship with the company; influence of family and friends’ relationship with the company; and the company’s purpose (such as a social mission). Research shows that many of these factors do resonate with youth, ranging from the impact of word-of-mouth to a company’s CSR reputation.
In other interesting study results:
- Affluent Millennials appear to want to perform their own research, make investment decisions and execute trades (in comparison with Gen Xers), but at the same time are more likely to consider a financial advisor a must-have.
- Affluent Millennials (27%) are more likely than Millennials or Gen Xers (18-19%) to believe that in the future banks will no longer be primary financial institutions. Theyu’re also more likely to predict a cashless society and a sharing-based economy.
- Affluent Millennials have loftier goals than affluent Gen Xers, being 3 times more likely to want to start a charitable foundation (19% vs. 6%) and start a business (30% vs. 11%). They’re also 50% more likely to want to buy a second home (27% vs. 18%).